No, cryptocurrencies shouldn’t be added to 401(k) plans

Digital assets are too risky for retirement plans, the Labor Department tells plan administrators

Cryptocurrency logos at an exchange in Barcelona this month. (Angel Garcia/Bloomberg News)

The Labor Department essentially just warned the managers of workplace retirement plans: Don’t you dare think about adding cryptocurrency — it’s too risky.

The department’s directive follows President Biden’s executive order this month calling for a review of the government’s regulatory approach to cryptocurrencies. Biden’s order talks about the volatility of cryptocurrency, but it also signals an acceptance of the viability of digital currencies and a lot of concern that it could lead retirement plans to prematurely embrace the investment as an option for employees.

Opinion: Ukraine is a big moment for cryptocurrency, but not for the reasons its promoters think

Globally, financial authorities are exploring the introduction of central bank digital currencies. The possibility of a cashless society makes investing in cryptocurrency seem like a no-brainer. If you’re late to this trend, you could be missing out on great gains, according to cryptocurrency proponents. But then these are people whose fortunes often depend on you buying into this speculative investment option.

With millions of people investing through their workplace plans, this is a key moment for digital assets. Here’s what you need to know.